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Blogs > Quocirca

Dealing with austerity - ensuring the best bang per buck

Clive Longbottom By: Clive Longbottom, Head of Research, Quocirca
Published: 13th July 2010
Copyright Quocirca © 2010
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The recessionary tide may have gone out for the moment, albeit by inches rather than yards, but the detritus of flotsam and jetsam that it has left behind is not a pretty sight.

From whole countries struggling with sovereign debt issues, through organisations struggling to manage cash flow and investments to individuals wondering what the next few years are going to mean for their lifestyles, the economic view has not been so difficult for some time.

For IT, it is also leading to some pretty tough choices. For many organisations, at least the old mantra of “don’t spend at all” has become a little quieter, but it is by no means the case that everyone can go back to the good old days of spend, spend, spend.

Undoubtedly, calling a halt to all IT spend is a) not possible and b) is commercially, in fact, dangerous, if not suicidal, for any business these days. For the majority, standing still is not an option—some expenditure on IT will always be required.

Ensuring that it is sensible investment, that the business will benefit, and that the organisation’s competitiveness in the market will either be enhanced or at least maintained has to be the focus. This requires IT and the business to get closer together; to better understand how each can help the other in ensuring that investments meet the overall requirements.

Quocirca has launched two free reports, with another imminent, that will help both business and IT people better understand how proposed changes within an organisation can be prioritised as to their possible value to the business—and also as to whether these changes should be carried out in house or outsourced to a cloud or hosting company.

The first of these reports, Building a case for DCIM  takes the reader through the use of Quocirca’s Total Value Proposition (TVP) methodology—a means of identifying exactly where the arguments for and against carrying out a change in an organisation lie.

Although the specific case used is for data centre infrastructure management, the approach can be used for any technological or business change.

The report looks at the arguments that can be applied around how the change impacts value, risk and cost at a business level, what are the costs of not carrying out a change and provides a simple approach to providing a “rule of thumb” return on investment for any change.

The second of these reports, Cloud computing – taking IT to task  takes a different approach, showing the reader how a business is run on process, and how processes need to be broken down into tasks.

These tasks need to be facilitated and automated via technology, and matching existing technical capabilities with the task needs identifies where there are gaps in the technology/business spheres. These gaps can be either plugged through bringing additional technology into the existing data centre, or by using external services.

The report helps the reader decide which processes in the business fall into three different process categories as follows:

  • Unique processes: those that identify the business as a standalone entity, so that people can identify the business directly—not just as “a retailer” or “a bank”. Here, we tend to be looking at the big-ticket processes; those that, if the process works as it should, result in the organisation gaining a patent, in gaining first mover advantage or in being the one to get a really good acquisition deal. These generally make up around 5–10% of an organisation’s processes.
  • Differentiated processes: those processes where carrying them out better than the competition will make you a “better bank”, a “more profitable retailer”, a more effective large organisation or a better company in a specific geography. Here, we’re looking at how these processes can incrementally impact an organisation’s bottom line. These processes generally make up around 20–25% of an organisation’s processes.
  • Commodity processes: those processes that it really makes little difference as to what type of organisation you are, where you are or what size you are. These include processes such as calendaring and purchase order flows, but also functions such as email and other forms of collaboration. The direct process is generally a cost to an organisation, and the key is to minimise the cost.

The third report, “A gift from IT to the business”, looks at how IT departments can take the initiative and use on-demand services to provide spend visibility to the business. The report looks at how on-demand can help IT to provide incremental value when and where it is needed most—helping to cut top line spending.

Between these three reports, Quocirca hopes to provide the reader with a toolbox to help identify whether a proposed project or change has the right attributes for investment under today’s economic climate, and helps IT and the business to come together to discuss and agree how such changes should be implemented for the greater good of the organisation as a whole.

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